On a recent trip to San Francisco it was always a surprise to see what to pay in stores. It was never as simple as just adding all the published prizes. There was always a surplus of taxes. Sometimes it was just an additional 50ct, but sometimes the increase in prize was substantial. The most extreme case being a bag of apples with a publised price of 1.99 but a final price of 4.50. Isn't there a single VAT and how can I know the prize to expect? If the taxes apply to everyone, why not simply publish the price including taxes?
There is no general VAT in the US but various sales taxes, which means that there isn't a single tax rate that shops could easily include in all prices. Depending on the location, there could be a sales tax from the state, county, city or even other institutions (transport authorities, etc.) so you cannot even set a price and print labels for a state or a metropolitan area, let alone nationwide.
Also, displaying lower prices is generally advantageous so as long as they don't have to do it, it would seem retailers have very little incentive to figure a way to deal with all this. Even if one would consider doing it (which is not the case as far as I know), they would just make themselves look bad compared to the competition. To use an analogy, even when several parties really wish to reduce their weapon stockpiles, it's too risky for one of them to disarm unilaterally and find itself alone without weapons when the others still have them (or in this case, display higher after-tax prices when everybody else advertises with before-tax prices).
|show 7 more comments|